Eiger BioPharmaceuticals Inc’s (NASDAQ:EIGR): Eiger BioPharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on the development and commercialization of targeted therapies for rare diseases in the United States and internationally. The US$108.42M market-cap company announced a latest loss of -US$42.45M on 31 December 2017 for its most recent financial year result. The most pressing concern for investors is EIGR’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for EIGR’s growth and when analysts expect the company to become profitable.Check out our latest analysis for Eiger BioPharmaceuticals
EIGR is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$28.51M in 2022. So, EIGR is predicted to breakeven approximately 4 years from today. In order to meet this breakeven date, I calculated the rate at which EIGR must grow year-on-year. It turns out an average annual growth rate of 17.53% is expected, which seems realistic. However, if this rate turns out to be too buoyant, EIGR may become profitable later than analysts predict.
Given this is a high-level overview, I won’t go into detail the detail of EIGR’s upcoming projects, but, keep in mind that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, a double-digit growth rate is not abnormal as the company is beginning to reap the benefits of earlier investments.
Before I wrap up, there’s one issue worth mentioning. EIGR currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in EIGR’s case is 67.01%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
There are key fundamentals of EIGR which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at EIGR, take a look at EIGR’s company page on Simply Wall St. I’ve also compiled a list of key factors you should look at:
- Historical Track Record: What has EIGR’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Eiger BioPharmaceuticals’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.